<Click on chart for larger image> The Financial Times –Fed’s QE has broken post-crisis pattern Rises in the S&P500 have correlated almost perfectly with injections of money The S&P500 hit bottom in March 2009 when it became clear that the Tarp (Troubled Assets Relief Program – the US government’s single most contentious act that requisitioned… Continue reading The Effect Of QE
The Economist – The Federal Reserve: How to taper safely Combine a small cut in bond purchases with a clear commitment to support the economy more if necessary AMERICA’S central bankers are in a tight spot. On September 18th the Federal Reserve must decide whether to begin to reduce (or, in the jargon, “taper”) the… Continue reading How To Taper
The Financial Times – Bernanke’s Maradona swerve hits bonds Has Ben Bernanke delivered a modern version of the Maradona effect? It may help to explain how the Federal Reserve chairman has managed to tighten US financial conditions by more than 100 basis points without touching the Fed funds rate. The analogy, first applied to monetary… Continue reading Bonds’ Term Premium
Barron’s – RANDALL W. FORSYTH: Beware the Bull The appearance of bulls and other positive images of the stock market on the cover of general-interest magazines has been a redoubtable contrarian indicator since, well, Henry Luce came up with the idea of Time magazine in the 1920s. That has been amply and empirically demonstrated by… Continue reading TIME Magazine’s Wall Street Cover Story
<Click on chart for larger image> The Wall Street Journal – Wanted: Jobs for the New ‘Lost’ Generation The financial crisis that struck five years ago this month opened up a sinkhole in the U.S. economy that swallowed Americans of all ages and backgrounds. Retirees lost life savings. Families lost homes. Millions of Americans lost… Continue reading The Jobs Market By Demographic
CNBC.com – Richest 1% earn biggest share since Roaring ’20s The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s. The very wealthiest Americans earned more than 19 percent of the country’s household income last year—their biggest share since 1928, the year before the… Continue reading The Rich Get Richer
<Click on chart for larger image> Economics21.org – When It Pays Not to Work Despite a decline in the jobless rate to 7.3 percent in August from 7.4 percent in July, the labor force data released Friday were disturbing. The reduction in the unemployment rate was caused by a decline of 312,000 in the number… Continue reading What Happened To People On Unemployment Claims?
The Wall Street Journal – Economists Expect Tapering Announcement Next Week A majority of economists surveyed by The Wall Street Journal—66% of the 47 who responded—expect the Federal Reserve to say at next week’s policy meeting that it will begin cutting back its bond purchases, a widely anticipated milestone in a period of extraordinary monetary… Continue reading Where Is Hilsenrath???
The Economist – Bond markets: A big number from Verizon Companies are still taking advantage of low yields to raise debt DEBT crisis? What debt crisis? The biggest corporate-bond issue ever was completed this week. Verizon Communications, an American telecoms group, issued a whopping $49 billion of bonds in order to finance the buy-out of… Continue reading The Record Verizon Deal
The Economist – Buttonwood: Back to normal Once again equities are beating bonds over the long run EQUITIES are triumphant again. Analysis by Jonathan Stubbs at Citigroup shows that American and British shares have outperformed government bonds over the past one, two, three, five, ten, 20 and 25 years. That follows a dismal period when,… Continue reading Bonds vs. Stocks
Reuters – Obama to nominate Summers as Fed chief: Nikkei U.S. President Barack Obama will name former Treasury Secretary Lawrence Summers as chairman of the Federal Reserve Board, Japan’s Nikkei newspaper said on Friday. The newspaper, quoting unnamed sources, said in its original Japanese version that Obama was “in the final stages” and moving toward… Continue reading More Trial Balloons For Summers